Total's landmark find could be enough to supply SA refineries for 4 years | Fin24
 
In partnership with
  • Money Flows

    About 3 000 super-rich have left SA in the past 10 years, according to a new report.

  • Nelson Mandela

    Madiba would have been alarmed at the polarisation and hate speech in SA, says Derek Hanekom.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

Total's landmark find could be enough to supply SA refineries for 4 years

Feb 07 2019 15:14
Paul Burkhardt, Bloomberg

South Africa’s first deep-water discovery, reported Thursday by French oil major Total SA, may prompt a rush of activity offshore by competitors as the country works to cut its reliance on imported fuels.

The Brulpadda find, estimated at about 1 billion barrels by Total Chief Executive Officer Patrick Pouyanne, could be enough to supply South Africa’s refineries for almost four years.

That’s a boon for a country that has always been short of oil and is running out of its scant domestic supply of gas.

“It is really transformational,’’ Andrew Latham, vice president of global exploration at consultant Wood MacKenzie, said Thursday. “This could be a discovery that kickstarts a bit of a gas strategy for South Africa.’’

The field of primarily gas-condensate - a light liquid hydrocarbon - was discovered about 175 kilometers (109 miles) off the country’s southern coast in the Outeniqua Basin.

The area, where Exxon Mobil and Eni SpA also hold stakes, may now draw further interest, especially since South Africa is due to introduce new legislation later this year aimed at spurring exploration.

The find “is potentially a major boost for the economy,” Minerals Minister Gwede Mantashe said. “We welcome it as we continue to seek investment.”

‘Catalytic Find’

President Cyril Ramaphosa is seeking to lure $100 billion of investments by 2023 to revive a struggling economy. The country’s energy supply is largely based on coal, while state power utility Eskom also runs turbines on costly diesel fuel. A failed exploration campaign in shallow waters has meant a gas-to-liquids refinery at Mossel Bay runs well below capacity.

Total’s discovery is a “catalytic find” for the country, said Niall Kramer, chief executive officer of the South African Oil & Gas Alliance, an industry lobby group. “There’s nothing that has been on this kind of scale.”

The resource could be about three times the size of all South Africa’s gas finds to date, according to WoodMac’s Latham.

Total, the operator of the license, now plans to acquire 3D seismic data before drilling as many as four more exploration wells there. But it cautions that the operating environment offshore is tough.

“The region is quite difficult to operate,” Pouyanne said on a conference call. “Huge waves, the weather isn’t very easy.”

Africa as a whole has seen an increase in drilling, with oil and gas rigs around the continent topping 100 in recent months, according to Baker Hughes data. The count was as low as 77 in 2017.

Total has a 45% working interest in Block 11b/12B, Qatar Petroleum holds 25%, CNR International 20% and Main Street, a South African consortium, 10%.

gas  |  oil  |  total  |  companies
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you think government can solve the Eskom crisis?

Previous results · Suggest a vote

Loading...